Amazon sinks as AI spending eclipses fastest cloud growth in five years
AWS revenue rose 39% and reached a $184 billion annual run rate, but Amazon said capital spending will rise further next year.
- On Thursday, Amazon shares fell about 6% in after-hours trading after the retailer's third-quarter profit missed Wall Street expectations, driven by massive cash burn.
- Aggressive spending on AI infrastructure drove the cash burn, with Amazon Web Services revenue surging 39% to $46 billion while the company forecasts about $220 billion in capital expenditures this year.
- Free cash flow fell to negative $42.4 billion over the past 12 months, as capital expenditure of $77.26 billion exceeded estimates by $20 billion, while interest expenses more than tripled to $1.7 billion.
- Amazon CEO Andy Jassy defended the investment, saying the company expects to spend "meaningfully more" in 2027 and characterizing the AI boom as being "in the very early days."
- The company projects fourth-quarter revenue between $240.0 billion and $247.0 billion, falling slightly short of some estimates, as Jassy envisions AWS reaching $1 trillion in annual revenue within five to 10 years.
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Andy Jassy’s prediction: Amazon could have two $1 trillion businesses within a decade
Amazon CEO Andy Jassy says AWS and the company's stores business could each reach $1 trillion in annual revenue in the next five to 10 years, something no business has ever done. AWS is at a $184 billion annual run rate, and Jassy expects it to grow more than 40% in both 2027 and 2028.
AWS will be a $1T business, Jassy says. But first, it will spend big.
Amazon wants to be the king of AI cloud computing and become the first $1 trillion revenue business. But to do that it will have to continue on its capex spending spree, its CEO said Thursday.
Business Insider
Amazon CEO sees AI spending 'meaningfully' higher in 2027
Amazon will spend meaningfully more than $220 billion on AI infrastructure in 2027 even as free cash flow sinks.
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The Star Kuala LumpurAmazon sinks as AI spending eclipses fastest cloud growth in five years
Oct 29 : Amazon.com on Thursday reported a massive cash burn in the third quarter, sending shares sharply lower, while it signaled higher capital expenditures next year atop an already huge amount in 2026. Amazon's cloud computing cash cow, Amazon Web Services, continued to accelerate, but the company's ag
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